Saturday, July 7, 2007

Poweful Democrat Proposes Carbon Tax

With an issue that is certain to be a political "hot potato" in the up-coming elections in the U.S., a leading Democrat is proposing a new tax on the "carbon" produced by burning oil, gas, and coal. Apparently he expects a public outcry and he wants to demonstrate that the public is not willing to pay the cost to cut "carbon" emissions and thus, presumably stop global warming.I'm not sure I understand the logic of this, but other Democrats want a carbon "cap and trade" system, where "non-polluters" could sell credits to "polluters", who would then be allowed to go on "polluting", but presumably at a lower rate because it would cost them. This way, (the logic goes) there would be less over-all pollution, and more non-polluting energy sources being used.Did you follow that? You get paid (a credit) to produce "clean" energy and you get penalized (cap) when you produce "dirty" energy. What proponents of the "cap and trade" plan fail to disclose is that this will still cost the public more for energy. When they realized it will cost them just as much, or more for energy than just a simple tax on "carbon", they're going to be at least as unhappy. Good luck on getting any meaningful legislation through Congress.Peter

By EDMUND L. ANDREWSPublished: July 7, 2007WASHINGTON, July 6 — A powerful House Democrat said on Friday that he planned to propose a steep new “carbon tax” that would raise the cost of burning oil, gas and coal, in a move that could shake up the political debate on global warming.

The proposal came from Representative John D. Dingell of Michigan, chairman of the House Energy and Commerce Committee, and it runs directly counter to the view of most Democrats that any tax on energy would be a politically disastrous approach to slowing global warming.But Mr. Dingell, in an interview to be broadcast Sunday on C-Span, suggested that his goal was to show that Americans are not willing to face the real cost of reducing carbon dioxide emissions.

His message appeared to be that Democratic leaders were setting unrealistic legislative goals.“I sincerely doubt that the American people will be willing to pay what this is really going to cost them,” said Mr. Dingell, whose committee will be drafting a broad bill on climate change this fall.“I will be introducing in the next little bit a carbon tax bill, just to sort of see how people think about this,” he continued. “When you see the criticism I get, I think you’ll see the answer to your question.”

The idea behind a carbon tax is to provide an incentive to reduce the use of fossil fuels like oil and coal, which are loaded with carbon, and increase the use of cleaner, renewable fuels like solar power, wind and fuels made from plants and plant waste.Many economists like the idea of a carbon tax, saying that it would be simple to administer and could profoundly affect energy choices.

But most Democrats are staunchly opposed, saying that a tax would raise the costs of travel, commuting and heating and cooling homes, and that it would be wildly unpopular at a time when voters are already angry about high energy costs. Republicans, they said, would seize on any such proposal as proof that Democrats were bent on raising taxes and increasing the size of government.

Indeed, many Democrats still cringe at the memory of President Bill Clinton’s trying to pass a broad “B.T.U. tax” in 1993 on most forms of energy. The measure passed the House but not the Senate, and more than a few Democrats believe the effort was one reason they lost their majority in the House in 1994.

Now, House and Senate Democrats are writing bills that would require factories and power plants to reduce emissions of heat-trapping gases through a so-called cap-and-trade system of mandatory requirements and tradeable pollution credits.

Most of the proposals would impose mandatory limits on the amount of carbon dioxide that companies would be allowed to produce each year, and those limits would become steadily more rigorous over time. A factory or a power plant that is already below the limit could sell its unused allocations to companies that were over the limit.The United States already uses a cap-and-trade system to limit emissions of sulfur dioxide and other pollutants that cause acid rain.

The European Union has adopted a system to reduce greenhouse gas emissions, though the system has come under considerable criticism for letting companies game the rules and for failing to reduce emissions in line with European goals.